Local authority employees, including social workers, will receive a 2.2% pay rise from January after months of dispute between employers and unions.
The Local Government Association (LGA) put forward the increased pay offer after unions rejected the offer of a 1% pay increase made in July.
The original offer sparked a strike across the three biggest public sector unions, Unison, Unite and GMB.
The walk out of around one million public sector employees caused councils including Bristol, Leeds and Leicester to suspend some social care services.
Local government employers entered into consultations over a higher pay offer after a second wave of strike action was threatened for October.
An LGA spokesman said: “After a protracted dispute, we are pleased that an agreement with the unions has now been reached.
“Our hardworking employees, who have worked wonders while councils have been tackling the biggest cuts in living memory, have been waiting since April for an agreement. Today’s breakthrough is good news for them.”
Unison head of local government Heather Wakefield said local government employees have “the lowest pay in the public sector and have suffered significant attacks on their conditions of work in recent years.
“We will continue to campaign for the living wage to become the minimum rate of pay in local government,” she said. The living wage is £7.85 and £9.15 in London.
The pay agreement will run until March 2016.